Doing Business in

Oman

1970, when His Majesty Sultan Qaboos bin Said assumed

power, was a turning point in the history and development of

Oman. Ever since this 'renaissance', the Sultan and his

government have endeavoured to promote economic

development and stability for the country's rapidly growing

population, undertaking a wide range of political reforms and

wide-ranging modernisation programmes, funded largely by oil

revenues and supported by international partners.

Over recent decades Oman's economy has been characterised

by stable growth and modest inflation, mostly driven by

revenues from the oil and gas sector. Recent oil price volatility

has undermined its efforts towards economic development and

resulted in fiscal imbalances and a growing debt rate.

Nonetheless, several opportunities for economic development

have surfaced due to economic diversification, captured in the

government's strategic five-year plans. Recently, under the so-

called 'Tanfeedh process,' greater focus has been put on

enhancing economic diversification centred on logistics,

tourism and manufacturing, as well as on improving enablers

such as the labour law and financing models.

The business landscape can be summarized as mainly government-centred and largely oligopolistic in nature. Private sector development efforts, which include further industrialization, privatization, promotion of entrepreneurship and facilitating foreign direct investments, are gradually taking effect. ‘Omanization’, which is aimed at securing employment for Omani nationals by setting a quota for each sector, is likely to remain part of this business environment for the near future.

The Gulf region (Oman, Saudi Arabia, United Arab Emirates, Qatar, Bahrain and Kuwait) has experienced high economic growth in recent decades, due largely to its vast oil and gas reserves. Trade between the Netherlands and the Gulf countries has increased remarkably and Dutch businesses have built an excellent reputation. In 2016, the export of goods from the Netherlands to the Gulf reached €6.4 billion. Economic diversification efforts in the Gulf countries – aimed at reducing dependence on oil and gas and increasing the share of the private sector in the economy – have resulted in new opportunities for Dutch business. In Oman, they can be found primarily in (renewable) energy, water, logistics and agrifood.

[2]

Taking into account its population growth and economic path towards economic diversification, there are ample business opportunities, particularly in the following economic sectors.

Priority sectors

Oil, gas and renewable energy Oman is expected to remain highly dependent on its

hydrocarbons sector for some time to come. Upstream in the

value chain, demand remains for expertise, innovative and cost-

effective solutions in some niche areas of oil and gas reserves

exploration and production. This is also true of its downstream

value chain. As part of its economic diversification process,

efforts are focused on adding value to the oil produced, for

example in the chemical and plastics industries. Another of the

Sultanate’s focal areas is stepping up the commercialization of

its substantial gas reserves, in particular by investing in the

country’s liquid natural gas production capacity.

As the Sultanate continues to develop its ambitious national

programme for enhancing economic diversification, as tariffs on

conventional power options rise, and subsidies on fossil energy

sources are gradually lowered, a deeper and more deliberate

consideration of alternative sources of energy are being studied

and translated into policy, e.g. in the fields of solar and wind

energy.

Oman’s level of solar energy density is amongst the highest in

the world. It has been assessed that a solar energy field with the

size of 0.1% of the total land area could, in theory, power the

Sultanate at current energy consumption levels. Moreover,

there are plans to provide incentives to homeowners to install

small-scale solar PV systems to generate their own electricity

and feed the surplus into the grid.

Endowed with over 2000 km of coastline, Oman is also

exploring harnessing wind power in certain areas. The result of

numerous pilot programmes shows that wind power has the

potential to supply a significant amount of power to the

southern energy grid (Dhofar region).

Within this energy transition, the expertise and innovative

technologies and solutions that Dutch companies and

knowledge and research institutes have to offer, could

contribute further to the solid reputation that the Netherlands

already enjoys in the energy sector in Oman. Business

opportunities not only arise on a national, larger scale (in

cooperation with the state oil and gas company PDO, as well as

other government-related entities), but also on a more local

scale, for example in and around the ports of Sohar and Duqm.

Logistics Oman is geo-strategically well located for the logistics sector to

flourish and sets out its ambition to become an important

logistics hub in its ‘Logistics Strategy 2040’. Oman has invested

heavily in the development of its ports (using the natural depths

of its shores) and airports. In addition, the country is expected

to play a major part in the region’s forthcoming new railway

system, connecting the Sultanate to Saudi Arabia and the

United Arab Emirates. Despite already having one of the world’s

best road networks, the Omani authorities have approved more

than 40 additional road projects for the coming years.

Its geostrategic location makes Oman an ideal route for global

supply chains, with the potential to alter the flow of goods

through the Arabian Peninsula. Given the solid reputation of the

Netherlands and existing bilateral networks in this field, it is

expected that Oman's growing investments in transport and

logistics will continue to provide business opportunities for

Dutch expertise, services and technologies beyond existing joint

ventures, such as between the Ports of Rotterdam and Sohar.

Water Like all other countries in the Gulf, Oman ranks amongst the top

10 most water stressed countries by 2040 (source: Water

Resources Institute). Oman consists of arid and semi-arid

regions, with an average annual rainfall of 125mm

(Netherlands: 800mm) and total renewable water resources of

1.4 km3/year. These internal renewable water resources come

from precipitation and groundwater flows, Oman not receiving

any fresh water from other countries through rivers or other

flows. Oman has 43 aquifer recharge dams (14 of which were

built after 2006), with a total storage capacity of 93.5 million

m3. As the peninsula is surrounded by seas/ocean, desalination

plays another important role in supplying the Sultanate with

potable water.

Oman’s commitment to private sector participation in the water

sector, as part of its restructuring of the management of the

[3]

sector as a whole, should open up ample opportunities for

companies, knowledge and research institutes to offer their

expertise, innovative and integrated solutions for the country’s

water resources management projects and desalination.

Agrifood Despite its discovery of oil in commercial quantities some

decades ago, over half of Oman's population is currently

engaged in the agriculture and fisheries sectors.

In agriculture, food security initiatives have been undertaken to e.g. reduce the cultivation of large crops, introduce water-efficient techniques, and to add more value to locally produced fruits, vegetables and fodder. Extensive government programmes also aim to promote modern farming technologies; establish infrastructure and irrigation networks and storage and export facilities; and to support agricultural research and training institutions. In summary: excellent business and investment opportunities for Dutch companies, knowledge and research institutes.

Another part of the Sultanate’s efforts to enhance food security and economic diversification focuses on the fisheries sector. With its vast coastal areas and direct access to the Arabian Sea, the fisheries sector is strategically well positioned. Furthermore, the prohibition of trawling in Oman's Exclusive Economic Zone and minimal pollution have helped the country's fish stocks to flourish. Using these comparative advantages, fisheries is one of the five prioritized economic sectors under the current five-year economic diversification plan. Efforts focus on various aspects of fishing, aquaculture, fish processing and international marketing, making Oman an attractive location for Dutch companies, knowledge and research institutes involved in commercial and sustainable fisheries.

Do’s and don’ts for doing business in Oman

Know your challenges Oman successfully combines the strong traditions of the Middle

East with 21st century modernity. The rich history and culture of

Oman and the hospitality and tolerance of the Omani people

attracts visitors and foreign investors alike. However, without a

thorough understanding and awareness of Oman’s unique

history and culture, these traditions and etiquette can be a

challenge.

Build relationships Building and maintaining personal relationships is essential for

doing business in Oman. It is worth investing time: trust, once

gained, is likely to serve you well in the long-run. Having a

reliable local partner, in addition to close contact with the

Embassy, can speed up the preparatory work considerably, as it

can provide market knowledge and valuable access to

established networks.

Understand (business) etiquette • It goes without saying that speaking and understanding

some Arabic is recommended and appreciated. However,

English is the language of business and is widely spoken,

particularly in the main cities.

• Conservative business dress for both men (preferably

jackets and ties or uniform) and women (covering

shoulders and knees at least – no headscarf needed) is

advised for business meetings and functions. It is not a

common practice for men and women to shake hands.

• The Omani attitude towards time is relatively flexible and

relaxed. It is not uncommon for Omani counterparts to

arrive late, but foreigners are expected to arrive on time.

• Omanis are keen show their hospitality, e.g. by offering

their guest coffee (often flavoured with cardamom),

haluwa (sweet delicacy made of dades), and/or raw or

processed dates. Burning luban (a type of incense) and

offering some rose water could also be part of their

hospitality.

• Respect is a key character feature one should show at all

times. This goes for e.g. religious holidays, customs and

banns (like alcohol). Do not show your temper and avoid

conflict. And patience is a virtue: very often things do not

move at the same pace as in e.g. the Netherlands, while the

Omani bureaucracy is extensive.

[4]

We support your business

Embassy of the Kingdom of the Netherlands The Embassy of the Kingdom of the Netherlands in Muscat can

support you in your Omani business endeavours through the

following services:

• Signalling and monitoring business opportunities.

• Providing information on sectors, laws and legislation.

• Providing general advice on your specific business plans.

• Introductions to relevant government authorities,

potential business partners and other stakeholders.

• Supporting trade missions.

• Promoting Dutch business. • Trouble-shooting and assistance in conflict situations.

Visiting: Way 3017, villa 1366, Shatti Al Qurm, Oman

Postal address: P.O. Box 3302, 112 Ruwi, Sultanate of Oman

Telephone: +968 24603706

Email: mus-ea@minbuza.nl

Websites:

- www.nederlandwereldwijd.nl/landen/oman

- www.netherlandsandyou.nl/your-country-and-the-

netherlands/oman

- Facebook: https://nl-

nl.facebook.com/DutchEmbassyOman/

- Business hours: Sunday-Thursday, 08:00-15:30

Dutch economic network in the Gulf region (Holland+You) This platform for economic service delivery by the diplomatic

network in the Gulf region aims to provide information on

doing business in the Gulf region, share best practices and to

strengthen business relations.

Website: www.netherlandsworldwide.nl/doing-business-in-

the-gulf-region

Twitter: https://twitter.com/hollandplusyou

Netherlands Enterprise Agency The Netherlands government has developed multiple

instruments to support Dutch companies doing business in

Oman. For more information, please visit the country page for

Oman on the website of the Netherlands Enterprise Agency at

www.rvo.nl/onderwerpen/internationaal-

ondernemen/landenoverzicht/oman

‘NL exporteert’ App A free export app, designed for entrepreneurs with international

ambitions. It provides information on events, the do’s and

don’ts of doing business, economic data and financing

possibilities. Download the app in the App Store (iOS) or in

Google Play.

Official name Sultanate of Oman

Government type Absolute monarchy

Head of State: H.M. Sultan Qaboos bin Said Al Said

Population 3.8 million (July, 2017)

Area 309,500 sq km (7.4 times bigger than the Netherlands), coastline 2092 km

Time difference +2 hours (NL summer time), +3 hours (NL winter time)

Currency Omani Rial (OMR) 1 EUR = 0.4611 OMR (13/09/2017)

GDP growth rate 3.1 % (2016), 4.2% (2015), 2.5% (2014)

GDP per capita USD 15,000 (2016)

Trade volume Exports: USD 30.4 billion (2016) Imports: USD 25.8 billion (2016)

Inflation 1.1% (2016 est.), 0.1% (2015 est.)

Global Competitiveness Index Rank 66th / 138 (2016)

Ease of Doing Business Rank 66th / 190 (2016)

Global Corruption Index Rank 64th / 176 (2016)

Main trading partners China, UAE, India, U.S, France, Japan & Saudi Arabia; Netherlands is the largest of the EU

Major exports Petroleum, re-exports, fish, metals, and textile goods

Major imports Machinery and transport equipment, refined petroleum, food & livestock, lubricants

Netherlands FDI in Oman USD 598 million (2016)

Published by: the Embassy of the Kingdom of the Netherlands in Muscat, Sultanate of Oman. © Ministry of Foreign Affairs of the Kingdom of the

Netherlands | October 2017